example 4 Annuities Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Chapter 8.4 2009 PBLPathways

Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10.

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000

Value at the end of 5 years Show that if regular payments of $1000 are made at the end of each year for 5 years into an account that pays interest at 10% per year compounded annually, the future value of this annuity is $6105.10. Payment Value at the end of 5 years 1 1000 (1.10)4 2 1000 (1.10)3 3 1000 (1.10)2 4 1000 (1.10)1 5 1000